Tag Archives: digital marketing

Way to Co! How co-branding can open the door to new customers

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It is common knowledge that gaining a new customer is tougher than retaining one, lesser known that it can cost anywhere between five and twenty-five times as much to do so (Gallo, 2014). In this blog I shall outline how co-branding can be the key to customer acquisition, alongside a few other benefits this strategy can unlock.

 

Co-branding is an arrangement whereby two different brands work together to create a product or service representative of both brands, in order to reduce new product costs and expose both companies to new markets (Stec, 2013). These sound like realistic benefits, however it is worth noting the article suggests no limitations, drawbacks or occasions where these benefits will not be realised. On the other hand, Monrabal suggests that you should consider not participating in this strategy if there is any perceived risk to your brands reputation (2016). See here for more risk-reducing factors to consider before using this strategy.

 

Co-branding was a general marketing strategy long before digital marketing, with noted success in 1975 when Bonne Belle and Dr. Pepper created a flavored lip balm that is still sold today. Using an academic perspective to back up a fairly basic reason why this strategy can work entails information integration theory. This theory suggests that people integrate information from a number of sources in order to make an overall judgment (Foster, 2014). Applying this to the previous example, Bonne Belle released the first successful flavored lip-balm two years prior to the co-branded product, whilst Dr. Pepper was a well-known soft drink brand – the brand loyalty and brand equity held were more than likely to convince customers of either to purchase the new product. Follow this link to see more successful co-branding examples.

Image credit: Sophie Bernazzini

You can employ a co-branding strategy for many purposes, the most notable including being to expand your customer base, reduce product development and investment costs and as a more basic benefit to simply increase revenue. It has had major success for franchised businesses in reducing investment costs, consider Subway and petrol stations fulfilling the needs of a long drive in one stop! Click on Kerry Pipes’ name for an article highlighting the benefits of co-branding for or with franchises.

 

In terms of expanding your customer base – the aim of this blog, co-branding of a complimentary nature is vital. It is likely customers of a similar product will have heard of yours and on top of this you can still benefit from the reputation and brand loyalty of the other brands product. One of the most successful examples of this is Nike+, the collaboration product between Nike and Apple based on a shared group of customers. Apple designed a chip to fit Nike+ shoes and monitor data that was linked to the users iPhone app, meeting the needs of runners who wanted to track their efforts. The app has over 18 million users and exemplifies the need for both parties to provide benefits to the other by engaging in this strategy.

 

The reasoning behind a need to continue to offer or provide mutual benefit is proven in the case of Shell and Lego. They had a partnership dating back from the 1960’s that split in 2014 after GreenPeace created a viral video, shaming Lego for selling Shell themed products at petrol stations whilst Shell planned to drill in the Arctic (Vaughan, 2014). The deal was thought to be worth £68m to Lego but the bad publicity from the video, which to date has over 8 million views, led to the split of the partnership and damaged brand equity for both companies. Click the picture below to see the video.

 

 

Other potential pitfalls to be wary of include: Diverging company values or missions, dilution of the brand, operational distractions and communication issues. All of these issues tend to develop over the long term, however any ventures should be properly evaluated before and during to ensure these outcomes do not occur, as any of these issues would be extremely detrimental to both brands. The other thing to mention is that despite perceived reduced costs as you are splitting them, there is no accounting for the time invested into the planning and the ongoing assessment of the partnerships value.

 

 

 

Image credit: Persona design

 

The image above illustrates just a few of the ways co-branding has successfully been undertaken. To ensure your customer acquisition strategy is successful, you must clarify the types of new customer you are after and partner with a company that gives you access either because they currently operate in that market, or because they can aid you in creating something to satisfy that market. The digital age has meant that any partnership can also benefit from social media and viral video hype, further spreading the reach as both partner’s followers will be able to view and share the content. With a recent study finding that content marketing generates 3x more leads than paid search – which has been touted as the best digital marketing strategy (Mccoy, 2017), the benefits are real.

To sum up, with the right mix of pre-planning, patience and sensible partner brand selection, co-branding can be a great customer acquisition strategy,  just promise yourself that you will invest the time necessary for its success!

 

References:

Foster, C. (2014). The Application of Information Integration Theory to Standard Setting: Setting Cut Scores Using Cognitive Theory. Ph.D. University of Massachusetts.

Gallo, A. (2014). The Value of Keeping the Right Customers. [online] Harvard Business Review. Available at: https://hbr.org/2014/10/the-value-of-keeping-the-right-customers [Accessed 7 Jan. 2018].

McCoy, J. (2017). 9 Stats That Will Make You Want to Invest in Content Marketing. [online] Content Marketing Institute. Available at: http://contentmarketinginstitute.com/2017/10/stats-invest-content-marketing/ [Accessed 7 Jan. 2018].

Monrabal, J. (2016). When Should You Co-Brand?. [online] Adage.com. Available at: http://adage.com/article/guest-columnists/brand/304810/ [Accessed 7 Jan. 2018].

Stec, C. (2013). Co-Marketing Vs. Co-Branding: What’s the Difference?. [online] Impactbnd.com. Available at: https://www.impactbnd.com/co-marketing-vs-co-branding-whats-the-difference [Accessed 7 Jan. 2018].

The only way is viral: How to tell if your social media campaign was a success

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Any business investment is made to benefit the company in question in one sense or another. However, measuring the direct financial gains from a social media campaign is next to impossible as you do not exactly get paid for every “like” on Facebook or “retweet” on Twitter. With 41% of companies in a survey of 1000 admitting they had absolutely no idea of social media’s financial impact (Baer, 2012), why is it that 88% of companies are using it for marketing purposes? (Bennett, 2014).

 

Image credit: http://www.newmediaandmarketing.com

Quite simply, the prominence of social media in modern life means that companies not creating social media campaigns are putting themselves at a major marketing disadvantage. Knowing this, alongside the fact that sharing content and creating eWOM (electronic word of mouth) is free, and therefore the cheapest form of marketing, it is no wonder companies are attempting to measure the return on investment (ROI). So, if this is the case, how do we place a financial value on the effectiveness of a social media campaign?

In her report “Can You Measure the ROI of Your Social Media Marketing?”, Donna Hoffman, scholar and principal of marketing at The George Washington University states that by trying to financially measure ROI marketers are incorrectly trying to quantify the return from a social media campaign (2010). Hoffman believes companies should instead be looking at what marketing objectives can be met by these efforts.

KPI’s

These objectives should be quantifiable and linked to a specific campaign, meaning that the objectives can be amended depending on what the business wants to achieve from the campaign. These objectives are also known as KPI’s (Key Performance Indicators). It is not possible to give a list of the best social media KPI’s due to the individual nature of business aims, however developing an understanding of general key social metrics will allow you to look at your campaign and assess whether it has been successful.

Once you have defined your goals, it then becomes possible to measure the success of the campaign based on metrics decided by the person who wants the best outcome for the company and knows what constitutes its success – you.

 

Click here to view the top 13 KPI’s for social media managers

 

 

Image credit: Klipfolio

 

As already established, setting KPI’s is the beginning step to measuring the success of a social media campaign and therefore these should be set at the first stage of the campaigns development.

However, there are different ways these KPI’s can be assessed for success. Using the two main metrics of social media marketing; “Reach” – the measure of the range of the influence of any content and “Engagement” – the actions taken by users on the posts (Ramachandran, 2015), allows for two different assessment approaches. The first is to measure what we would call the superficial gains of a post, likes, followers gained, shares to name a few. This can be audited by you or your company very easily and is a good measure of the reach of the post and how well it did against your KPI’s for that campaign (bear in mind the only way to audit the success of your social media is against what YOU set out to achieve).

Google Analytics

Another option available is Google Analytics, using this you can audit what happened because of your campaign. This is possible because the software allows you to see where visitors to your website came from and to understand their behaviour on your site. This is the engagement side of the metric and can show you the number of conversions and the value of said conversions as a result of any social media post. Using Google Analytics to see the impact of a post also allows comparison to your own previous campaigns, although they will have had different KPI’s as each campaign is different, it is always useful to see if a different style led to a large increase in range or engagement!

More reasons you need to be using Google Analytics

There’s always a way

As a final note, although Falls said that the issue in determining social media’s ROI is in trying to put numeric quantities around unquantifiable human interactions (2008), the two methods outlined in this post should give you the tools to work around this. Setting your own KPI’s allows for a new kind of ROI calculation without needing to place a numeric quantity ($) on interactions, with Google analytics doing the opposite and placing a conversion value on interactions.

Thanks for reading! For more on how to measure the success of your social media campaign why not visit our friends Klipfolio here.

 

References:

Baer, J. (2012). Not Tracking Social Media ROI is Your Fault. [online] Convince and Convert: Social Media Consulting and Content Marketing Consulting. Available at: http://www.convinceandconvert.com/social-media-measurement/not-tracking-social-media-roi-is-your-fault/ [Accessed 1 Dec. 2017].

Bennett, S. (2014). 88% of Companies are Using Social Media for Marketing. [online] Adweek.com. Available at: http://www.adweek.com/digital/social-media-companies/ [Accessed 1 Dec. 2017].

Falls, J. (2008). What Is The ROI For Social Media?. [online] Social Media Explorer. Available at: http://socialmediaexplorer.com/content-sections/tools-and-tips/what-is-the-roi-for-social-media/ [Accessed 1 Dec. 2017].

Hoffman, D. (2010). Can You Measure the ROI of Your Social Media Marketing?. MIT Sloan Management Review, 52(1), pp.41-49.

Ramachandran, S. (2015). Reach and Engagement: Making the Most of Social Media Marketing – TFM Insights. [online] TFM Insights. Available at: https://insights.technologyformarketing.co.uk/reach-engagement-making-social-media-marketing/ [Accessed 1 Dec. 2017].